INSIDE THE BELTWAY Grocery Shoppers Redefine Value

JENNIFER HATCHER

CHIEF PUBLIC POLICY OFFICER & SENIOR VICE PRESIDENT,

As universal as the word is across the consumer landscape, recognizing what value means to consumers and how to meaningfully deliver it to them can be challenging. Understanding value in today’s shifting cultural context is imperative for the food industry, particularly as shoppers adjust their purchasing patterns and habits amid continued inflation and uncertainty.

The latest survey of grocery shoppers by FMI — The Food Industry Association in our U.S. Grocery Shopper Trends 2023 series reveals the meaning of “good value” and how it is becoming more complex as consumers navigate grocery aisles. Although definitions vary, value is often understood in terms of price and quantity. However, shoppers are increasingly expanding their notions of value to include quality, relevance, convenience, and experience.

Quality reflects the importance of personal food standards and goals around eating well, and includes an emphasis on freshness, minimal processing, health and nutrition, product sourcing, and ethical considerations such as sustainability and labor standards.

Relevance refers to shoppers’ needs versus wants and reflects their decision-making around necessary versus indulgent items. Questions about how well a product aligns with personal/household preferences, its usefulness, and its potential for waste have taken on greater importance as shoppers seek to meet the preferences and needs of individual household members while sticking to their budgets.

Experience captures the importance of pleasure, enjoyment, novelty, variety, and discovery as well as the physical aspects of shopping such as store cleanliness and the friendliness and knowledge of store employees.

Lastly, convenience continues to be a key element of value, including more typical criteria such as speed, ease, and accessibility (which shoppers sometimes trade for lower price) as well as expectations around engagement, flexibility, experience, and relevance.

While shoppers say that getting good value is a priority across all income and demographic levels, younger shoppers are clearly driving the shifting definition of value toward a more holistic measurement that goes beyond the traditional price-to-quantity ratio. For example, 62 percent of millennials increasingly say they prefer to minimize food waste by buying only what they need, a strategy that speaks to relevance.

Convenience and a pleasing shopping experience are also key drivers of value for younger shoppers: 47 percent of millennials say that they are willing to spend more money to avoid shopping at multiple stores, while 50 percent say they’d spend more to shop at more pleasant stores, compared to just 16 percent of Baby Boomers.

Younger shoppers are also more willing to buy the best quality items regardless of price. Fifty-two percent of millennials and 42 percent of Gen Z-ers express that sentiment, compared to just 22 percent of Baby Boomers.

Across generations, shoppers also note benefits related to convenience and experience as factors for choosing in-store versus online. For example, while some shoppers appreciate amenities such as in-store cafes, pharmacies, and banking, which help them save time by combining grocery shopping with other household tasks, others appreciate not having to deal with crowds and lines. Store cleanliness, ease of navigation, familiarity, and employee treatment also play roles in decisions not just about which stores shoppers trust and prefer but also whether and when they shop in person or online.

Ultimately, shoppers’ desire for more flexibility and control over their shopping process shapes their decisions about which methods they employ. While the search for “value” remains a priority for most shoppers, how they define it has evolved. Today’s shoppers see value through the lens of a broader range of considerations that reflect the complexity of their lives, habits, values, and priorities.

Loyalty has a distinct connection to value, so understanding value from a consumer perspective is imperative for the food industry. Retailers can differentiate themselves by thinking about value more holistically. Developing a unique identity by embracing multiple dimensions of value that go beyond specific categories or departments can help retailers stand out by standing for more than just good prices and deals— although both remain a top priority! ■

To download the U.S. Grocer Shopper Trends 2023 – Value Matrix report and to sign up to receive updates on future reports in the series, visit www.FMI.org/GroceryTrends.